Brokers say new lender Investec Professional Mortgages will struggle to win business due to its “uncompetitive pricing’.
The lender, a subsidiary of Investec, launched last week with a range of products aimed primarily at company directors and partners of professional practices as well as senior executives, managers or business heads. It only lends through selected intermediaries but plans to widen its distribution in the coming weeks.
The lender’s main selling point is its underwriting criteria. It will accept variable income up to 100 per cent of a borrower’s basic income in calculating affordability, which is ideal for those with big bonus payments. The minimum income requirement is £50,000 for qualified professionals and £75,000 for business professionals.
The range contains a number of two and three-year fixed rate residential and buy-to-let mortgages. Rates start at 3.19 per cent for a residential two-year fixed rate at 65 per cent LTV and the cheapest residential three-year fixed rate is 3.39 per cent at 65 per cent LTV.
Buy-to-let rates start at 4.29 per cent for a two-year fixed rate and 4.49 per cent three-year fixed rate, both up to 70 per cent LTV.
John Charcol senior technical manager Ray Boulger says: “It is great to see a new lender in the market but I think Investec is doing a Tesco and launching with uncompetitive pricing to test its system. It is not going to get much business at these prices so let’s hope that changes once the test period is over.”
London & Country associate director of communications David Hollingworth says: “It is good to see more competition but Investec will face challenges with the current pricing of its products at the moment. Underwriting and service is important, but brokers go for a deal with the best overall package.”